The Queen's speech 2013 marks the moment when the two coalition parties began to go their separate ways. With a few exceptions, of which immigration is the most important, the new legislative programme is more striking for what it does not contain than for what it does. In the main, each party has been able to block the other's most cherished projects. The question now is whether inability to govern also means an inability to get re-elected. That one remains open.

Break this down a little more. First, the coalition. Yes, it will continue in office, probably for the full two remaining years. It remains united, in political expediency terms at least, by the overarching need to show that the economic strategy followed since 2010 is at last beginning to bear fruit, if it does. It also remains united by the fact that it needs to stay in office for its own credibility. This is not 1923 or 1929, when a variety of alternative coalition configurations existed. Today, there is only one viable coalition on offer. The Cameron-Clegg coalition will therefore soldier on. It is, like the banks, too big to fail.

But the larger animating purpose articulated by the coalition enthusiasts in 2010, the possibility that there was a sustainable liberal-conservative alternative to both Labour and to Thatcherite Conservatism, has failed. The apostles of this view, who certainly included David Cameron and Nick Clegg themselves, wanted to create a compassionate, internationalist, less intrusive, greener and more modern form of social and economic liberalism. True, they can point to some successes along the way, but in the main they have not done what they set out to do – and the new focus on immigration underscores their failure.

They have failed for two main reasons. Because of their inflexibility about the place of taxation and spending in a liberal-conservative project, that was always going to be dominated by economic recession. They should have been much more ready to tax and spend more imaginatively. But they have also failed because too much of the Tory party has simply refused to change in the way that Cameron promised, leaving their leader exposed and weak. So now, with the general election already concentrating minds in more partisan ways, the liberal-conservative project is effectively over.

The coalition is now little more than the sum of its parts. On the one hand there is a Tory majority that smells upcoming electoral defeat, senses Cameron is a loser, suspects George Osborne has steered the economy on to the rocks and is losing its head over Ukip, which some see as the repository of a truer Thatcherite Toryism.

On the other there is the Lib Dem minority, gripped by being a party of government, focused on the need to hold on to its 57 seats in 2015, massively aware of the possibility of wider eclipse and, partly for that reason, newly uncompromising in its refusal to do the very things over Europe, human rights, supply-side economics and Trident that their increasingly rightwing partners increasingly long to do.

The Queen's speech embodied that minimalism. True, the speech was not without substance or interest. Social care, state pension reform and HS2 are all big-ticket items, financially and politically. And the supervision of post-release prisoners plans may be one of the better quiet things to happen in a long time in the serially neglected rehabilitation of offenders field. But the Lib Dems have blocked anything on Europe or online communications monitoring, while the Tories have pulled plans on alcohol pricing and sidelined anything green. The maximalist days of 2010 are well and truly gone.

The big exception to all this is immigration. Immigration is at the centre of the coalition's programme for four reasons: first, because all parties know that immigration is a huge concern among voters and thus requires a political response; second, because all modern politicians know that, when everything else is going badly, a dog-whistle to the voters on immigration may refresh the support that the other policies cannot reach; third, because immigration is in some ways an easier political lever to pull than the other, in my view more desirable, social policy alternatives; and, fourth, because when all the red herrings, mythologies and bandied statistics have been dealt with and put to one side, UK immigration policy really does remain a mess in need of reform.

Since all the parties recognise the sensitivity of immigration, This is one area on which the coalition parties have been eager to be seen to co-operate rather than risk taking radically different positions. And because they are all, Labour included, spooked by Ukip's surge of success in the local elections last week, they are all keen to be on the front foot over the issue. Call it abject convergence or sensible convergence, but no party – Labour included – intends to vote against the government's new bill.

The challenge for all the parties is whether they have anything to say on immigration except that they want it to go down as much as possible. And that's the problem with the proposed legislation. The Lib Dems warn that the government is creating a bureaucratic monster by making every landlord and GP an immigration official on the sly. Labour does better at shifting the argument, insisting, as Ed Miliband did in the Commons, that the coalition is ideologically unwilling to grapple with the low-wage, slum-housing, foreign-recruitment base on which so much immigration rests.

That's a start, and it's true as far as it goes. But the deeper problem is that immigration is not a political issue just because immigrants are supposedly getting a good deal. It is also an issue because the native population thinks it is getting a bad deal at the same time. So cracking down on immigration abuses will only ever deal with half of the grievance. The confidence in government and social solidarity that would flow from successfully lifting young native people out of joblessness and poor housing would far exceed any confidence that flowed from another crackdown on migrants. But you have to be a confident party to propose measures like these. And right now the only truly confident party in Britain is Ukip.